Intel eyes IoT for its server business

Declining PC sales might not hurt Intel much if it maintains monopoly power in the data center market.

Intel is not worried about the declining PC market. The "really exciting" opportunity for the company is the "billions of other devices" that the Internet of Things will soon spawn, said executive vice president Diane Bryant, who also runs Intel's Data Center Group, which is a very critical part of the business.

Earlier, Intel talked about betting its future success on IoT. Much of that has to do with the kinds of devices such as sports equipment for which it will provide processing power. The head of the Data Center Group has a different perspective, though. Intel has a near monopoly of the data center processor market with 96 percent. As more devices get connected, there will be an explosion of data, necessitating more servers and data centers.

This does not mean that Intel is in the clear. A lot of questions remain about the future growth of the company. Competition is starting to crop up in the server market as well. While ARM-based processors are not ready for the kind of heavy lifting Intel processors are capable of, some are already experimented with ARM-powered servers. Google is also testing its own chips for servers, like the technology responsible for its AlphaGo artificial intelligence.

This is why China sees building up its semiconductor industry as a critical part of future economic growth. The country's foundries are many years away from being able to compete with Intel in the server market, but it will get there. Local companies are already striking deals to build out and improve its capability in making ARM chips. China certainly has the land, population and skilled workforce to develop its own data center industry as well. Of course, having data pass through China servers currently comes with its own set of complications, but nothing remains the same forever.